Section 6 - IMRF

1. Member Cost
Mem bers whose employer joined IMRF after January 1,
1998, will be credit ed 20% of their total prior service, up
to 5 years, free of charge.
The member can purchase the remaining portion of prior
service by paying the appropriate IMRF contributions
with interest. The amount of member contributions due
is based upon the member’s annual salary on the date
the employer joined IMRF. Interest is calculated on the
contributions from the first year of prior service through
December 31st of the year preceding the current year.
2. Payment Schedules
IMRF will mail the member a Past Service Payment
Schedule which offers two payment plan options for
establishing the past service.
Option 1 is the Lump Sum Payment Plan
The Lump Sum Payment Plan allows the member to
pay the total cost with a single payment and purchase
all the eligible service he or she chooses to purchase
at one time. The member can purchase all, a portion,
or none of the past service listed on the payment
schedule.
How the member pays for the service
Exhibit 6K
Page 2 of 3
Option 2 is the Unit Payment Plan
The Unit Payment Plan allows members to purchase
one or more months of service credit at a time.
Members may pay as often as they like, buying back
credit from the latest month to the earliest month of
eligible service. However, they may not buy more
months than indicated on the Past Service Payment
Schedule.
3. Using funds from an IRA or another pension plan to
purchase the service
The member may pay for service with a qualified pension
plan as defined by Section 401a, 457, 403b, etc. of
the Internal Revenue Code, or a traditional individual
retirement account (IRA). The member would complete
and submit IMRF Form 6.01, “Request for Rollover
Approval” for determination of eligibility.
How purchasing the service will affect the member’s pension
Members who want to know how the prior service will affect
their pension should wait until they receive the Past Service
Payment Schedule. Then, they can call 1-800-ASK IMRF
(1-800-275-4673) or their current system for a pension
estimate.
They can also refer to the IMRF Past Service Booklet,
which can be found online at www.imrf.org, or by calling
1-800-ASK-IMRF. The section titled “Is it worth it to purchase
service” provides a detailed description of how to calculate
the impact of service on a pension.
Purchase of prior service will NOT make a Tier 2
Member eligible for Tier 1.
If the member plans to retire under the Reciprocal Act
The Illinois Retirement Systems Reciprocal Act requires
a minimum of 12 months of service credit with any single
reciprocal pension system. If the member has less than 12
months of service in a reciprocal retirement system, that
service will not be counted in the calculation of his or her
reciprocal pension. Exception: A former teacher aide who
transferred to a position covered by the Teachers’ Retirement
System (TRS) and who has less than 12 months of IMRF
service credit can apply that service toward a reciprocal
pension. A list of the 13 systems covered by the Act can be
found in Section 5 of the IMRF Manual for Authorized Agents
and on the IMRF website, www.imrf.org. Local police and fire
pension funds are not covered by the Act.
The governmental unit’s contribution for prior service is paid
through future contribution rates. Therefore, a separate
adjustment to its employer payment is not required.
Employer’s Cost
Each year the employer’s contribution rate is recalculated
based upon its employees’ credited service through the end
of the year. Any prior service purchased during the year is
reflected in that calculation.
IMRF Form 6.07 (Rev. 12/10)